Do you know who the real owner of the company you do business with is? It's often not just the director or CEO. The real ultimate stakeholder (aka UBO: Ultimate Benificial Owner) is often hidden behind layers of complex ownership structures. However, finding out the UBO is an important part of your due diligence process. It could just be that the UBO is a person in a sanctioned country or is in a criminal network. So failing to identify the UBO can have serious consequences, including legal repercussions and reputational damage. With these five tips, you can identify the UBO and minimize risk.
Tip 1: Verify who you are doing business with
Did you know that Heineken consists of more than 100 companies? So there are more companies that use complicated structures and thus actually consist of more than one company. If you get a new customer, at that moment you also want to be sure which entities that company consists of. In the Netherlands this often seems quite simple: You go to the Chamber of Commerce and ask for an extract, or you ask the customer yourself. But a Dutch company does not necessarily mean that the UBO is also Dutch. So a check at the CoC is not enough.
One solution to this is the use of D-U-N-S numbers. This 'Data Universal Numbering System' number is in fact unique per entity worldwide. Whether you want to find out the UBO of a Dutch company, or do business internationally, with a D-U-N-S number you can easily verify which company you are doing business with exactly. This way you avoid B.V./N.V. errors and you are always looking at the same company.
Tip 2: Do your own due diligence
Now that you know which company you are doing business with, we can start looking at the company's UBOs. If you're lucky this is easy and shareholders and other key players within a company are listed on their own website or in an extract from the Chamber of Commerce. Sometimes you have to look a little harder among annual reports or other corporate documents. But in practice we often see that UBOs like to hide through other companies, B.V.s or Holdings. In theory, you should then search these companies again for the UBO, and that's how you can eventually find the UBO of the company.
Tip: UBO structures are complex. To make them a little easier to understand, we have written a white paper: Understanding UBO structures
Tip 3: Involve an expert
Is manually finding out the UBO too complex or time-consuming for your organization? Then it might be convenient to hire an expert. In addition to finding out the UBO, they will also record an audit trail for you. An audit trail is essential when a regulator comes to see if your company has properly investigated the new customer. So engaging an expert pays off but is not a long-term solution. Not only is it costly, but it is also a temporary solution to a process that needs to be done on an ongoing basis. So it's important to quickly educate your compliance department on how to figure out UBOs. So by engaging an expert, you do (temporarily) reduce the compliance department's workload and buy time to find a sustainable solution while remaining compliant with the law.
Tip 4: Use a compliance tool
Especially when you do business internationally or when speed of your customer acceptance process is key, it's helpful to research a compliance tool. Essentially, these tools do the same thing as an expert; it finds out the UBO and logs an audit trail. indueD, our compliance tool goes a step further. It uses the D-U-N-S number to find out and screen the UBO within minutes. Because knowing who the UBO is says nothing about whether you are allowed to do business with this UBO.
Tip 5: Monitor the UBO
Today's UBO is not tomorrow's UBO. So you not only want to know who you are doing business with today, but also who will be in front of you tomorrow. Therefore, as a company, you will have to do a new UBO check periodically to stay compliant. Because you have to do it repeatedly, it is all the more valuable to make this a quick but careful process. Tools like indueD do this for you. They keep track of changes to UBOs, as well as PEP and sanctions lists. So should anything change that affects the company you do business with, you'll be notified immediately.
In summary, it is important to be sure which company you are doing business with, and which UBO you are doing business with. Finding this out can sometimes be very easy, but often finding the UBO is needle in the haystack. D-U-N-S numbers, research, experts and tools can make this process a lot easier. If you then also continue to monitor the UBO, you are completely assured of a foolproof system and minimize your risk.
Learn more about Altares Dun & Bradstreet and the UBO
Because we are an official partner of the Dun & Bradstreet Worldwide Network, we have access to the largest business database in the world. With more than 175 years of experience and a patented data quality process, we ensure an up-to-date database. This gets daily updates so you always have the latest data. Our experts have extensive knowledge of global corporate structures and UBOs and are happy to help you find a suitable solution for your challenge. Contact us hier .